tv Newsmakers CSPAN February 10, 2013 6:00pm-6:30pm EST
address here on c-span. >> coming up, "newsmakers," with chris van hollen bought by senators discussing immigration. later, president obama speaking in leesburg, >> our guest on "newsmakers" is representative chris van hollen. he is a senior democrat on the budget committee. his district has several contractors waiting on the result of the sequestration. we are speaking to you on friday afternoon and you have just returned from a democratic retreat. nancy cook is the tax and budget reporter for the "national journal." lori montgomery is with "the washington post." lori, you're up first. >> house democrats have prepared their own bill for dealing with
the rest of the fiscal year. tax increases, republicans have said they will not go for any tax increases. everyone thinks the sequester is a bad idea. what is the plan to forge a compromise? >> we want to ask the republicans to take a balanced approach and i think there is growing pressure among other republicans to replace the sequester through a combination of cuts that take place over a longer time because they do not want to harm the economy in the short term even as you try to reduce the deficit in the long term. also by closing some of the tax loopholes. we heard in the last presidential campaign from mitt romney and paul rand that there are all these tax breaks and loopholes that disproportionately benefit very wealthy people. speaker john boehner said he
could come up with $800 billion through a tax reform plan. we're simply saying to the house republicans that we want to do with speaker john boehner said he could do. use some of their revenue from closing loopholes to close the deposit. you are right. republicans so far have said they're not willing to close one tax loophole, not for a corporate jet or big oil companies for the purpose of reducing the deficit. when it is that trade-off, are they more interested in protecting the economy and defense spending? then i think he will begin to see a little bit of a change in attitude. >> what is there is not a change in attitude and calculations? this deadline is different than previous ones. we were facing the prospect of a default. it was a stone wall. we could not afford to hit it. where were facing taxes
immediately going up. it was a pretty hard stonewall we could not afford to hit. this time, they're saying we really do not want this to happen, but if it does it is the other guy's fault. is that kind of what we are seeing here? >> the president has been very clear. he does not want this to happen. it would be bought for the economy and very disruptive to important services right across the board whether it delays your social security checks, air traffic controllers. it is just a very disruptive to the economy. >> it is a less damaging deadline. it gives us more room to pressure. >> i'm concerned that the republicans will not really come to the table until we actually tripped over the march 1st date and the sequester actually begins. one thing that should be concerning to everyone is now
have a lot of members in the house republican caucus who say they want to see these very disruptive across-the-board cuts take place. that is a significant part of the house republican caucus. on the other side of the caucus you have folks like the chairman of the armed services committee, mr. mckeon, saying, "wait a minute, i do not know if we want to put at risk defense spending, these national security investments." so, that will play out. i would much prefer to see us resolve this before we hit the march 1 trigger date, but i do believe if we go over it -- i certainly hope republican colleagues will come to their senses. >> what is the game plan, say we do go over the march 1 deadline, just as we went over the fiscal cliff deadline? what is the game plan to deal with it and how much time do you think congress and the white house has to deal with it before this becomes an economic drag?
>> i think it is already becoming an economic drag looking at the last quarter of last year. you saw a downturn in economic activity in a factor behind that has been, many analysts believe, the anticipation of these across-the-board cuts. so, are you getting this slowdown -- if you are getting this slowdown in anticipation of the cuts, it will get worse once the march 1 date hits. my view is we have to deal with this now, and you are raising a broader question about these things upon us. we have the march 1 deadline and the sequester. march 27 is when the government's authority to operate ends, and then, of course, republicans moved the big debt ceiling debate to may 18. so, you have these self-imposed economic wounds, and really what we should be doing is dealing with them all at once in a
comprehensive manner. if we cannot deal with it for a 10-year period, at least deal with it through the remainder of this fiscal year and that is exactly what the house democratic alternative did. we would replace that sequester with deficit reduction achieved over a longer time. in suburban maryland, represent a lot of people that would be directly affected if the sequester hits. do you think the administration is doing a good job of preparing federal workers and folks whose paychecks depend on what happens in the next few weeks for how it will work and how to plan their lives? >> we have been urging them to provide guidance to federal employees because as we get closer to the date there is more and more anxiety, understandably. they are trying to provide notice to employees about things that can be expected, but the problem is it affect each agency differently, so there is not one
rule of thumb that will apply to every federal agency. part of the impact will depend on the extent to which employees make up most of the budget, as opposed to agencies that have more of a procurement budget or their budget is contracted out. i should emphasize that while it will hit federal employees and that is not good for anyone, that will hurt -- it will hurt around the country. let's take the national institutes of health, for example. yes, it will impact the people that will work there, but the national institutes of health provides grants to universities and scientists around the country who are doing research into ways to save lives, cure diseases, treating diseases and a lot of that will seize up. so, it is not simply the federal employees. i mean, that is very disruptive, but throughout the country you will see negative impacts and
that is just one small example on medical research, which is important to the economy. >> i just came from a briefing at the white house where it was the first time they talked about how this will be implemented. they have been reluctant to advertise the role they will have to play in implementing this thing -- the executive branch will have to play. do you think that was a wise move, not to be more open about how this will happen? we are only starting to hear, well, there can be furloughs with a 30 day notice and the specifics of what will happen, if it happens. >> that is because we and the white house have been focused on trying to look for ways to avoid the sequester. the president put forward his large year 10-year budget plan to do that in a balanced way, and more recently the president called for replacing it with a next. we were able to avoid the first two months of the sequester.
it was originally scheduled to take place beginning january 1, and we provided a mix of cuts and revenues over a time to replace those, and that is the model for replacing the sequester going forward. we set a precedent for doing it that way as part of the agreement to avoid the fiscal cliff and we think that is the model that should be applied going forward. that is exactly why in the house that democrats oppose this -- proposed this balanced approach. >> how likely is it -- i know the senate, kretz are trying to figure out a bill legislation to unravel the sequester, a short term one or a long term one, but would he be effective if we came off with another short-term solution and then it would come up again? would that be successful in your mind? >> well, the most successful thing would be to solve this longer-term, right? the sequester represents $1.2 trillion over 10 years.
the best case would be to replace the full length of the alternatively, we should adopt something like the house proposal which at least replaces it for the remainder of this fiscal year, but even a short- term replacement would prevent the across-the-board cuts from taking place and provide a little more time to work on a longer-term solution. when i say "replacement," i do not mean kicking the can down the road in allowing the deficit to increase but it would be a balanced substitute. this does bring up the overall issue that because we are so focused on these deadlines, we are ignoring the larger issue, which is trying to get greater investment in the economy right now, help put more people back
to work in construction, investments in science and research, as we deal with the long-term deficit in a smart way. we need to do both of those things, but our focus has to be on jobs and the economy now and all of these artificial outlines are just disrupting. >> so, the debt is not an immediate concern for you? >> well, the debt is primarily a longer-term concern. as you know, when the economy was falling through the floor, it was important for the government to pass the recovery bill, the stimulus bill, to put people back to work and that stop the freefall and helped to turn the corner. now we need to reduce the deficit so it does not grow faster, stabilize the debt as a percentage of gdp -- no doubt about it, but the biggest impact, on the out years as you see more baby boomers retiring.
it is not that we should ignore the problem until then. we could act now, but we could take measures now that kick in six or seven years down the road to bend that curve. the focus has to be economic growth. right now, the danger is too much austerity immediately. we saw from european friends that it does not work. certainly, in the out years if we do not bring the deficit down, that will also be a drag on the economy. >> 11 minutes left. >> your colleagues on the republican side of the aisle have said that the only kind of cuts that they would be willing to trade the sequester for our entitlement cuts, and the white house has put some things on the table that are really relatively modest in the full panoply of entitlement changes that you could make, like reining in the measure of inflation that you
apply to social security benefits, reducing the eligibility age for medicare -- are those things that democrats are willing to accept now as we approach this next round of deficit reduction? what more are democrats willing to do to rein in those programs because the affects of those two has touted are relatively modest on the long picture. >> remember, the president cost budget that he submitted last year, actually achieves more healthcare savings, or medicare savings, then the ryan republican budget, but the president does it in a different way, as did the house democratic alternative budget. our approach to health issues has been to improve the coordination of care, to try to change incentives, moving away from fee-for-service, where no one has an incentive to contain
costs, to one where we focus on reimbursing providers based on the value of care, not the volume. we would ask pharmaceutical companies to pay higher rebates, the kind they were paying in early-2000's. yes, we need to achieve savings in medicare, but, it is a we do not want to simply transfer the rising healthcare costs onto onto the back of seniors, which is what the ryan voucher plan would do. they would not reduce overall healthcare spending spending, which is 18% of gdp. they would transfer those rising healthcare costs on to seniors, and i should emphasize the latest rational budget office reports show the per capita increase in medicare is quite low historically speaking and the growth has been slower in
the medicare program than the private healthcare system. simply taking a senior and transferring rising costs on them not only puts a burden on seniors, but it does not save more money for the health care system as a whole. we need to contain those costs, but we have different approaches. we do not want to put the risk on the back of seniors. >> what about social security? >> on social security we think you need to look at reforms and the revenue side. if we could do together on a bipartisan basis, and some people have called for another commission, not as a way to kick the can down the road, but to really try and come up with solutions. again, i want to emphasize social security is fully solvent until the year 2034 or thereabouts, right now. after that, if we did nothing at all, it would still pay $.75 on
the dollar. a lot of people who try to say social security is going bankrupt, they are trying to push for changes that would put seniors at risk. so, we do not like some of the proposals that are, again, just increasing the costs and risks for seniors. if you look back to the tip o'neill/ronald reagan summit over social security, that is the kind of process that might be able to lead to a solution. >> i am curious about the house democratic retreat to you just came from. we are facing a lot of these goods coming up, the sequester, many cliffs coming up, the sequester, the debt ceiling -- what were you talking about to strategize for these self often
imposed fiscal crises, as you talked about? >> we heard from a range of folks, the vice president, former president clinton, the head of the imf, christine lagarde, and panels where the focus was on jobs and the economy, and how we do more to expand economic growth, share prosperity and deal with the long-term deficit in a balanced way so that we are able to sustain economic growth in the out years. we looked at a lot of ideas on trying to make our economy more competitive, how to encourage more innovation and more investment in everything from infrastructure to broadband, to new ideas -- i mean, remember, it was taxpayer dollars that helped to see the internet in the beginning. investing in technology at the basic research phase is important to long-term economic growth. so, there are a lot of ideas that we focused on there, as
well as trying to look for that balanced approach to the long- term deficit and the particular proposal house democrats have proposed to prevent that very destructive sequester from taking place. >> it seems that your ideal with the sequester with house democrats did not go far. stimulus measures on job training are not getting through congress. it seems until these physical -- fiscal fights, resolution there, until we see that, nothing is getting through. >> that is the concern. we look at that issue. the president, of course, will deliver his state of the union address this coming week him and he will address those kind of questions. we are so caught up in dealing with these short- term, self-imposed crises, that it is undermining our ability to
come up with a long-term, comprehensive plan. it is a philosophical difference. some republican colleagues do not believe there is any role for the government beyond providing for the defense and funding the pentagon. it is the view of some. it is not the view of the great majority of the american people. i think the president will propose -- nobody knows what the president will say, but i think he will propose ideas about how to spur innovation in the country and the fact that the government has had an important role in research. i mentioned the national institutes of health. you have other agencies, energy or other sectors, that can provide seed money for those sorts of things. you are absolutely right. we still have this standoff over these short-term crises and we have proposed a way to deal with
them in a balanced way that i, again, point out that republican colleagues recognized for months, leading up to the november election that there are tax loopholes and benefits that benefit wealthy people. they are still there. what they refuse to do, at least today, is say that we should get rid of those loopholes to reduce the deficit, and i hope that will change as the public engages. >> four minutes left. >> it is really hard, to be honest with you, to see how we get through the debt ceiling fight in the summer. your republican friends are working on a budget that balances in 10 years as their banner for how to solve our problems. the white house has indicated that we were only trying to do $4 trillion, we have already done 2.5 trillion, let's move on to other issues and spend more money in the meantime.
two different issues. nobody has articulated, so far, a way for the two sides to compromise and get us past this next major crisis. do you have thoughts on how we get past it? >> well, in addition to the fact that it has not enabled us to get beyond the crisis, we also need to tackle big issues like immigration reform. we want to take on the issue of gun violence and gun safety. the overriding issue remains the economy and jobs. this hinders the effort. the solution is what the president laid out and what a speaker boehner seemed to want to do at one point, which was to get the grand bargain, a comprehensive solution, so that you deal with this once and for all. if we can at least replace the sequester between march 1 and the end of the year with a mix of alternative revenue deficit reduction, we do have the time
to do bigger things through tax reform and other reform efforts that deal with the long-term deficit and provide, from our perspective, some of that important investment in infrastructure. so, again, i understand why people would be skeptical given we are really hoping that as the american people engage in the debate and the president, be on the state of the union address, has said he will keep people engaged through the old campaign apparatus, we think we can move forward. it will require the engagement of the american public. people will have to focus on these issues, call their members of congress and let them know where they stand. we want to get beyond these short-term crises and deal with the problem. >> you reference the model of
the early 1980's with president ronald reagan and tip o'neill. a group of legislators went offsite in a room together and solved the social security out of the time. -- problem of the time. is that model workable today? >> i think it can be. if there was a willingness -- >> is the president inclined to ask for it, because that is where it came from, the white house? >> i do not want to speak for the president, but i think the president would welcome the idea of a bipartisan group getting together to tackle these issues. i think it is an important model. the president said just a few days ago that the proposal that he put on the table in his conversations with speaker john boehner remain on the table, so let's pick up those conversations where we left off, and it gets back to the question they were really on their way, in my view, to try to resolve these issues in a more comprehensive way. what happened, as we know, a
speaker boehner recognized he could not sell the idea of any party faction in his caucus, so he walked away from that round of talks. i think really engaging is the way to go. again, the house republican caucus'politics are very tricky, and we stand ready to provide the boats for a rational solution which is happened for other things. >> with that point, thank you for being with us this week. we appreciate your time. >> thank you. >> thank you, chris. >> "newsmakers" is back with nancy cook and lori montgomery after 20 minutes with chris van hollen. the conversation was about the sequester and the march 1 deadline. who has the levers of power to craft a deal?
>> well, i do not think anybody does because i am not sure anybody thinks there is going to be a deal. it was interesting that chris van hollen, who represents suburban maryland, and would be one of the least likely to want to see this hit, is acknowledging that he is growing concern that republicans will not come to the table until we trip the march 1 date. he is joining a chorus of people saying they are concerned that this is going to happen. there are incentives on both sides to want to have it happen. republicans want the spending cuts, and democrat's want to republicans for the spending cuts, so i am not sure anyone is exercising leverage right now.
>> the discussion about the big issues -- nancy, you talked about the short-term deadlines of the focus on longer-term fiscal economic crisis with economic -- aging baby boomers. how do you get past that, get to honest discussion about the huge fiscal issues? >> it is really tricky. congress is so partisan and divided, perhaps more so than it has been and the parties have different visions. we see that again and again. representative chris van hollen is talking about more stimulus spending while republicans talk about much deeper spending cuts. i think the spring will be illuminating as senate democrats and house republicans put out their budgets, but i do not see
the chance for a resolution this spring. >> well, we go from crisis to crisis, then. >> well, what is interesting is that republicans have a strategy. they have not had a strategy before, and now the strategy is to get to their budget and force the senate to put out a budget, and it would be the first time since obama cost first year in budget that we -- in office -- obama's first year in office that we would have a democratic budget, and the theory is if we can get these visions on the table we could have a discussion and maybe we even use the budget conference committee process as a vehicle to hash all of this down -- all out. they do not really have a plan
for the next step, which is to solve the actual problem because if you have a balanced budget plan from the house here, and more taxes in spending and -- and spending, it is hard to see >> even the democrats remain the president is still ok with certain things the rest of the democrats are not, like cpi and cuts to medicare. house republicans and liberal democrats do not see them as politically palatable. those are issues that democrats will have to face because the congressional budget office reports show health care costs will rise given the number of baby boomers that will take advantage of federal programs and the democrats have yet to
talk about ways in which they would really, honestly, be willing to over -- overhaul those programs. >> as we close, why not the model of the reagan/tip o'neill compromise? it is different than the president's negotiations, but getting a wider group around the table, why is that not percolating in this town? >> look at the needle -- leaders. mitch mcconnell is not interested in doing more deals. he has been saving them a lot, and he is worried about it. boehner has demonstrated that he can not necessarily lead his conference. that is part of the problem. who are the negotiators that will solve the problem in any will solve the problem in any room?